The Media Barons Control the Conversation – Apple vs Qualcomm and the Reason for the Suits
Today is all about these new press barons out there, the big names in social media and Google.and a really big battle occurring here, in Korea, and in China.
We’re also going to talk about this really big battle occurring here, in Korea, and in China. What’s going on between Apple and Qualcomm, and why the battle?
Mark Zuckerberg and Larry Page Are America’s New Press Barons
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Below is a rush transcript of this segment, it might contain errors.
Airing date: 01/27/2017
The New Media Barons Control the Conversation – Apple vs Qualcomm the Reasons for the Suits
Craig Peterson: Hey, a quick welcome and shout out to all of our new listeners. We’ve got quite a few right now which is always wonderful. I’m on the road right now. I’m actually out in Las Vegas and looking around, it’s been interesting to watch this town over the years. I think the first time I was out here was back in the 80s and came out for Comdex and I’ve been coming out for CES every year. This year I wasn’t here for the Consumer Electronics Show. I was here, you know, a little late last year, earlier this year. But it’s kinda fun. It’s a nice trip and meeting with some clients and doing a few things is always nice. Hey today, we’re going to do a TechSanity Check on two things. First of all, we’re gonna talk about these new press barons out there. And we’re also gonna talk about a really big battle occurring, both here and in Korea. And in China, in fact. We’re gonna talk about Apple. Their big battle right now with Qualcomm. All of that and more. So stick around.
Well Mark Zuckerberg and Larry Page are said to be the new press barons here in America. I don’t know if you saw it but Google today announced that they are doing something very different. They are no longer going to allow certain types of ads. Now that’s not new. Google has long blocked ads they consider to be spam. Ads they consider to be harmful. The ad networks have, over the years, contained all kinds of nastiness including viruses, spyware and other things. So Google started by getting rid of those as it found them. It went a little bit further and found ads that were misleading, got rid of those. Well, now, we’ve got Google and Facebook, both deciding who is spreading fake news.
So what Google is doing is they’re saying, hey, if you’re publishing stuff that we didn’t like to see, we’re not going to allow our ads to appear on your site. Now, Google is starting out in kind of a nice way, if you will. There’s saying, hey listen, if you’re pretending you are a real news site. If you’re pretending that you are a, you know, the BBC or CBC or Fox News, and let’s say instead of Fox News, your URL is Fax News. But the website looks a lot like Fox News so people are going to be confused. So what Google is saying is we’re gonna do something here. We’re gonna stop that. If you’re pretending to be a real news site and you’re doing it by mimicking the site and by using a misleading URL, then we’re going to stop showing ads on your site. And of course that’s how most of these sites make their money. It’s through ad revenue. And I have a couple of sites myself that make money through ad revenue. And I try to do it legitimately. In fact, one of those sites, I just got a notice from Google talking about HGPS vs SS or HDP, you know, using SSL which has been a subject I’ve been talking about a lot lately.
So now we’ve got Google deciding, hey listen, you are a fake site because you’re pretending to be this other site. Well that’s just the start of it. Ultimately what’s gonna happen here is Google is going to take one more step. You know what’s gonna happen, right? You know it’s going to happen. Google’s not going to be content which is finding people who are truly fake news sites, right? They’re gonna take it to the next step and say, hey listen, you are a fake news site. So instead of fake news site, it’s gonna be you’re a fake news site. You get the difference there? You get my drift? You see where they’re going? This is actually going to be a bit of an issue. In fact it may be a huge issue as time goes on.
Now over on Zuckerberg’s side, they’re going to do similar things to what Google is doing with advertisers, advertising revenue and things. But Zuckerberg is trying to go even further. And Facebook is going to change its algorithms and it’s
going to be looking for topics that are being covered by several media outlets. And if those topics are being covered by the media outlets that Facebook likes, they’re going to allow it to go into your feed. If your topic is not one that’s on the credible, according to Facebook media outlets, it’s not gonna let your topic go up. So how’s that right? How did they choose what’s legit? What happens when the majority of these news sites get it wrong? Look at the whole Russian thing. It turned out to be a scam, right? Oh yeah, yeah, Russia hacked our election. No they didn’t.
CNN was just reporting, I think it was yesterday or the day before, that in fact the number of people at the inauguration turned out to be greater for Trump than for Obama. But they only admitted it a week or two afterwards. So for the first couple of weeks, what, it’s fake news? You know, diversity is how we get the truth. Having multiple news outlets. Having multiple ways for you to find out what’s going on to decide what’s right. The assumption here is you’re an informed consumer. You can only be an informed consumer if the government is not watching what you’re saying, telling you what to say, or if, in this case, the new press barons aren’t telling you what to say.
What’s the old expression? Don’t argue with the guy who buys his ink by the barrel. And that’s in reference to places like the Gray Lady there in New York. And some of these other huge media outlets in years past. What are we gonna do now? These new press barons are doing much the same thing. They’re deciding what they think is real news. And where did all these fake news stuff come from? It came from the political side. It’s absolutely crazy. This is not legit at all.
Alright, the other thing we wanna talk about is Qualcomm. That is really big. Trending right now in social media for some good reasons. Apple, of course, makes a number of devices. iPhones, certainly, as well as some iPads that contain cellular technology, so that you can connect to the cellular data networks in order to get your data in and out of you devices, right? So that’s, you know, that’s a good thing, that’s very, very handy. What’s happening is Apple is upset because of Qualcomm’s licensing scheme. Now here’s how it works. If they, if Apple buys a $20 chip from Intel, in order to do a very simple thing which is connect to the data networks. Nowadays that’s considered simple. It’s not a big deal. But it’s a $20 chip, right, into a $650 iPhone for example. How much licensing? How much royalty do you think should be paid to Qualcomm, right? They were able to patent the technology. They have some good technology. No particular complaints there. But if Apple’s not buying the chip from Qualcomm, how much should they pay? Well Qualcomm’s licensing scheme says that Apple had to pay based on the value of the device the Qualcomm chip is built into. So Apple’s paying Qualcomm licensing fees based on $650 rather than the $20 chip that Intel provided them with. Apple’s pretty upset about that. Apple’s saying, hey listen. This is crazy. That’s 5-10 times by the way. 5-10 times more for licensing fees than anyone else in the industry gets paid. Isn’t that something? And it’s more than 20 times higher than some other companies.
So when you look at firms who are licensing similar technology in the same industries, Qualcomm is charging as much as 10 times more than it should. So that’s why Apple’s taking them to court. Qualcomm is arguing, and I think legitimately hey listen, we have good technology. We helped make the entire internet work. Mark Zuckerberg maybe should be paying them royalties.
So, if they’re such a great company and they’re doing such a great job, we really should be paid commensurate amounts of money. So, you know, that side seems to make sense too. But when now the government’s involved and the government gets to say that this is an unfair trade practice. And when the Apple’s and others of the world are arguing, hey, Qualcomm, the law says in the United States, that if your technology is, or becomes a standard in the industry, you have to have reasonable license fees and reasonable license rates. Because, of course, we don’t want something to become a standard and then they just price themselves so high no one can use it. Because that certainly isn’t defeating the patent system, but that’s making it more and more expensive ultimately for consumers as well.
So there’s a lot for them to consider. Court cases right now in China. We’re sure that they’re going to pop up more in Korea. We’ll probably have more in Europe. We’ll probably have them here as well. We’ll see what happens. Qualcomm’s also upset because Apple held back more than a million dollar, basically a bonus, payment to Qualcomm because of their, you know, upsetness if you will, with some of these license fees. So, we’ll see what happens there. It’s really an interesting thing because it’s going to affect everyone. This isn’t just Apple. Everybody. Your android devices, etcetera, use Qualcomm. Again, pretty good company. But they’re taking a scorched earth legal strategy here. And as such, they might countersue Apple as well, for patent infringement.
And this gets us down to the basics of the problems with the patent system in the United States. Under Obama, they changed it entirely. It is no longer the first to invent. It’s now the first to file. So any company that’s out there are now who sees, oh wow this is a great idea. Let’s file this. And yet some has had that product they’ve been working it, refining it for a year, for 10 years. It doesn’t matter. Whoever had the most money and the best patent lawyers gets the patent. Forget the rest of you. Again, thanks Obama.
And then on top of that, we have the society where technology is moving so fast that frankly almost everything that is being patented is obvious. It is an obvious next step which technically is not patentable but now you have to sue in order to show that it was an obvious next step. And that could be a difficult thing to do. And I have been an expert witness before in patent cases where it was just crazy. I was on the side of the people who are fighting against some of the companies that held patents that should never been issued in the first place. And they ended up settling just because of the money involved, but anyway, they’re very big companies.
So there’s a lot to talk about. A lot to consider here. Good work. It would be interesting if this particular suit has an impact on our patent system. I think patents that are issued today in the computer world for technologies have to be dramatically revised or even eliminated.
Visit me online, of course, http://CraigPeterson.com. Love to hear from you guys. You got my direct phone number and text number right there on my website. And thanks for subscribing. If you haven’t already, make sure you go ahead and rate the podcast. Again, easy, http://CraigPeterson.com/itunes. Have a great day. And we’ll talk with you more tomorrow. Bye.
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